We all have dreams or plans for our retirement. Nick’s love of cars is already driving his plans to add to his classic car collection – with real cars!
The Chancellor, George Osbourne, announced in his Budget Statement from 2015 that people would be able to have more choice when they retire, and can do exactly what they like with their pension fund.
What does this change mean for our retirement plans?
Peter Gale, Wealth Manager at AAG, shares his thoughts.
“Having more choice at retirement has really changed the pensions landscape. There used to be a limited range of options, but now, you have the freedom to do what you would like when it comes to retirement.”
Nick is a 52 year old successful lawyer, who is predicted to have around £1,000,000 in his pension pot when he retires at 60. Ever since he’s been a boy he’s dreamed of a garage packed full of a classic cars. With an Aston Martin DB5 as the star of the show, his £1 million pension fund could deplete quite quickly.
“It would be easy for Nick to withdraw the entire amount and spend every last penny on the cars” Peter explains, “but the reality is that he still needs an income to maintain his lifestyle. Nick and Sarah won’t be able to live comfortably on the £113.10 a week he’s entitled from the state pension.”
“Clearly, planning and consideration is needed to ensure that Nick makes the right choices and gets the right balance.”
So, what planning needs to take place?
As Nick only has 8 years until he plans to retire, he should start to consider his options. review and reassess his personal financial plans now.
There are a multitude of options available to him, so professional advice could be the difference between enjoying retirement and simply surviving retirement. In fact, a study by Blackrock found that people who use professional financial advice have 2.5 times the retirement savings of those who have not used such help.
“Looking at the bigger picture of all your assets and liabilities enables you to make some informed decisions. For example, it could be easy to dismiss an annuity simply because it is no longer a necessity, but that doesn’t mean they aren’t suitable. They do remain a viable option to be considered.”
Peter sums up, “The focus needs to be on finding a balance to maintain your lifestyle and fulfil those retirement dreams.”
Take Action Today!
1. Do you know when you want to retire?
2. Do you have a robust plan in place?
3. Are you aware of what options are available when you reach retirement?
4. Do you know how the changes made in the 2014 Budget affect you?